barton. welcome to "bloomberg markets." ♪ vonnie: we will take you from washington to london and stories out of new york and vienna this hour. breaking economic data in the u.s. and julie hyman is with us. -- in new home sales at the month of october, month over month the decline of 1.9%. this on the heels of better than estimated data on existing home sales yesterday as they rose to their highest level in about nine years. and a final rate on the university of michigan consumer above 91.6%.93.8%, a little bit better on estimated. data hast economic been a little bit stronger but

not helping stocks at the moment. we are seeing a pause after we saw the major averages hit their highest in yesterday's session. investors, as they tended to do, the upward march is taking a step back and saying has the recent investment big just -- advancement and justified? the s&p is down 1/3. i've been watching the relative strength index of the s&p 500, momentum indicator. the rsi on the bottom. if you blow it up and look at it, essentially when you see the relative strength getting a little bit closer to the upper line or above it, that is overbought signal. we will be watching that come not quite there yet. goling back as we see stocks down. other asset classes we are watching commodities. we could see today.

crude oil pulling back in this exact leading to the opec meeting in vienna. the preliminary talks have stalled out and now in deferral of a decision of production agreement until tuesday. the sticking points are iran and iraq. copper pulling back a little bit and gold is down 2%. the vix's rise and a little bit as we get stocks going down. big corporate story have to do with eli lilly. the stories experimental alzheimer's drug. regression is setback in trial. it could have been a blockbuster drug. eli lilly said it will not only try to develop this but others to treat alzheimer's. it will take a nine cents charge as a result of this. the stock down about 13%. biogen is also developing alzheimer's drug is also down and juno therapeutics is

plunging down and it was doing a cancer drug trial and two patients died, specifically for leukemia. definitely watching those drugmakers today. to a guestll speak about the eli lilly story. the gains we have seen. the stoxx 600 is down about 0.5%. the risk between the european and u.s. market keys on widening when it comes to stocks. , thenies traded 14.2 times lowest since july 2012 versus the s&p 500. today, it was all about the autumn statement. going to be, she is talking to us in a second party essentially, philip hammond, the chancellor, reducing the gdp

forecast. the government will be borrowing up more as well and he is pledging to balance the books earlier in the next parliament. this is the yield. we are up by 10 basis points to 1.46 percent. the highest since may. this is the brexit the line. the day before we knew the result. 50went all the way down to basis points and we have been rising because of the pound's decline. highest since before brexit in light of the comments from mr. hammond, the chancellor. let's have a look at sterling. it was lower already against the dollar ahead of the autumn statement as well. it is still down, a lovely chart showing view where we were before brexit won 47% and change. we are back up to

1.28. we are lower today from the autumn statement. these are following the head of chancellor hammond's statement. these are the property brokers plunging as 18%. the government decided to scrap british and will help households that live in rented accommodations. countrywide shares sinking and .el properties dropping this is the result of the announcement today by chancellor philip hammond. just a few of the things were looking at. the vonnie: we will dig into the details. the first word news. president elected donald trump plans to announce south carolina governor nikki haley to be the u.s. ambassador to the united nations. an outspoken truck credit brought much of the presidential race is the first woman to get an appointment. she has limited foreign-policy experience.

angela's chancellor merkel said she is not happy about the possible collapse of the transpacific trade deal that donald trump has vowed to remove the u.s. angela merkel warned germans from turning to isolationism but acknowledged voters are apprehensive about globalization. a u.s. air strike in syria has killed a senior al qaeda leader. the pentagon said it was carried out by a drawn last week and he was said to have taken part in attacks against u.s.. opec has pushed off the issue of whether iran and iraq will join production cuts. to two delegates, the oil cartel has deferred the crucial matter to ministers who will meet next week. opec is trying to agree on cutbacks to stabilize oil prices. italy's form in -- former -- the billionaire said at the top managers at his company support current prime minister matteo renzi.

make italy will easier to governor. berlusconi believe they will get the prime minister to much power. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. mark: philip hammond delivered his first fiscal policy since he took office back in july. here's what he outlined to parliament five months to the day after britain voted to leave the you. philip hammond: we will maintain our commitment to fiscal discipline while recognizing the need for investment to drive productivity. and fiscal had room to support the economy through the transition. hammond'smore on announcement, over to anna edwards who joins us from westminster.

earlier, prime minister theresa may promise and ambitious plan, how bold was chancellor hammond today? bold andm not sure ambitious is what we got. we heard the statement from the institute for fiscal studies and johnson said it was the kind of wait and see budget. and now to one in which the chancellor did very much. we did see reaction in markets. the currency market briefly and in the guild market. the chancellor having to deal with much reduced expectations, especially about next year. mr. hammett: today's forecast is 2016,owth to the 2.1% in higher than forecasted in march. in 2017, the growth to slow to 1.4%, which is a attribute to lower investment and weaker

consumer demand driven respectively by greater uncertainty and by higher inflation resulting from sterling depreciation. anna: weakening the growth outlook giver by the office of budget responsibility and the is weakenedaid it by expectations about reduced investments and a slower consumer environment because of the stronger pound. the u.k. economy may have held relatively well since of the brexit vote, but philip hammond wants to get economy what he described as ahead of the challenges that may lie ahead. he has stepped away from his commitment to get to a budget surplus. that is going out the window. he did have to increase in the amount of borrowing. mark, what you were talking about earlier, about 100 billion pounds tossed around by those at

pwc and confirmed by others ahead of today's statement. the number was more than that. it was 120 2 billion pounds. ilds going down. it is still well below the record in 2009 and 2010 print mark: he was clearly strong the by their deteriorating finances by the forecast. to announce aged few eye-catching the measures on infrastructure and productivity. what for the details? anna: absolutely. levels called i watering and he did introduce productivity-based investments in infrastructure. fund, 20nal investment 3 billion pounds over five years. new announcements on housing and different forms of transport and

broadband infrastructure. andas a bit of a to do list he will be speaking shortly having to do with export financing and startups and make a short startups can scale up as they get the financing they need. there were many things to talk about and raise the questions if pension is over, if people will be protected from austerity measures of the past when we go into the next element. there were indications they would continue to be predicted -- protective. some of the house builders, andding companies reacting some of those real estate businesses. anna edwards. mark: coming off -- global inflation watch. -- and the divergent pass between the sad and ecb could drive market activity going forward. we will discuss all of this was

a michael, this is next. this is bloomberg. -- all of this with a michael -- that is next. ♪

mark: i am mark barton. vonnie: i am vonnie quinn. this is "bloomberg markets keybank -- markets." the fed is set for a rate hike in december. one of the main focus is on speculation of the ecb pots future, grabbing headlines. joining us is michael pond, head of global research as barclays. let's jump in a talk about inflation and what the market is looking for. we will get to donald trump and

the fed saw that in a moment. not every metric is telling us the same story. michael: that is right. inflation is still fairly low at around 195 on the 10 year rate. higher than where it was and the summer. it is still well below a normal level around 230, 240 which is where it was from 2010 and 2014. vonnie: how quickly can market expectations become inflation? have risen 20hey basis points over the past couple of weeks. that couple of upward pressure on inflation. we have seen inflation go up. 2%e inflation has been below and now it is above 2% and it has been for most of this year. we think it celebrates forward of continued wage gains as the labor market tightens further.

even though we expect the fed it we thinkn december, inflation's have gained momentum and inflation is set to rise. how inflation or policyonary on trump's is what we're speculating about? michael: what actually gets implicated? potentialrice and the for trade policies, immigration policies and fiscal policies it through infrastructure spending and tax cuts to lead to higher inflation. the markets have balked at the rumor but we need to see the fact. we know the direction toward higher inflation across of the board unless they lead to a recession. we do not know the magnitude of what we will see. mark: that is the point i want to make. this chart which you cannot see, mario draghi's favorite gauge,

five-year inflationary rate, which is 1.6%. it has come off record lows in one .2%. expectation arising around the world on the back of the trump victory. they were rising thereafter. is it warm rented, michael? should expectations be rising? -- is it warranted, michael? michael: we do not think so. it is overdone in terms of the u.s. inflation has already been on policy push trump's the risk it goes further. in europe, still plenty of slack and the ecb has a lot of -- a lot to do. is aink the move in europe bit overdone unlike the moves in the u k and the u.s. are treasuries,

themselves, oversold at the moment? achael: we have called about 50 basis point to selloff in the 10 year point if trump got elected. that is about what happened because we think the markets should be prices that not only higher inflation but higher inflation risk premium and real rate. we have gotten is that and we think will stabilize and arranged around these levels. vonnie: what about treasury security? a look into my bloomberg and you can see there is been a massive move and obviously given what huge,id, this is not a but do we stop here or is there a catalyst for reversal? michael: we think they break even and can normalize which means higher break even and continued outperformance of tips relative phenomenal.

in realt said, website rates in tips are tied to real rates. tips have a decent amount of duration. some investors may be disappointed if they only by that break- buy tips evens. tips can lose money if inflation goes up and demeans real rates are going got. mark: what do you recommend for the u.k.? today's autumn statement day. you cannot see this chart but you know it well. are at. break even, we the levels we have not seen in two years partially because of the big decline in sterling. how big of a problem will inflation be for the bank of england? it's initially indicated it would look through inflation caused by the movement sterling. recently, as they have backed off that message because they do not want expectations to get out of control here. we have seen in a report you

it is likely to come with the more supplies. meeting the high demand from the market. andie: michael pond barclays. two were for joining us. of the biggest movers in the u.s. session including .ohn deere, jumping to a record this is bloomberg. ♪

vonnie: this is "bloomberg markets."ybank -- it is time for bloomberg news flash. is counselingline almost 2000 flights because of the strike abide pilots. -- strikedo with a

abide pilots. it has to do with pay. start --planning to with the backing from the royal family, chord with people with the knowledge. the youngest workers on wall street said there is no danger is they will be replaced by robot. the firm asked professionals how technology will affect them. at least 8% of those over 26 predicted that will lose their jobs. virtually none of the younger workers agreed. that is bloomberg news flash. to julie hyman was looking at earnings movers. julie: i am tempted, i cannot do the robot. i will not do that.

earnings. a look at is the best performing after the tractor miller reported earnings that beat estimates. 16th straight quarter that that they of top to earnings. and a presidency to give and there's been an agricultural slump. less demand. the company reiterated its plans to cut costs by 2018. we are watching the hp, hewlett-packard enterprise and hp ink going dead opposite directions. -- in opposite directions. now are higher even after the company's forecast gave it room to miss analysts's immense. amazedeat even as sales -- missed.

ink, profits may fall signaling cuts will be needed to prop up earnings. hp ink is falling even though what they said between the two companies was relatively similar. we are watching urban outfitters, one of the worst performing in the s&p 500 down 9%. comparable sales miss estimates especially the disappointment from anthropology where sales fell 2.7%, almost twice what analysts predicted. the company said part of it was due to increased online sales. is saw higher cause for cut -- costs for customer deliveries and the margin could fall versus last year because of higher markdowns. people getting discounts, not good for urban outfitters. mark: to julie, thank you. 3:25 in london.

greg clark joins us from westminster with bloomberg's anna edwards brees stay tuned next -- and edwards. -- stay tuned. days of after two gains. stoxx 600 is down by 0.2%. sterling gets lower. it was lower going the to the autumn statement and lower on the other side of the autumn statement as well. you are watching "bloomberg markets america." ♪

vonnie: live from new york and london, i am a. mark: i am mark martin.

-- i am mark barton. -- i am vonnie quinn. julie, you have the latest. julie: little change ahead of the opec a meeting in vienna on tuesday. we could see more volatility with these numbers coming in a couple of seconds. indeed, unexpected drop in inventories of 1.2 6 million barrels. it looks like analysts were estimated a million barrels. leg up. we saw a big building gasoline inventories. refineries up by 1.6%. we are seeing this initial bouts on the headline crude oil inventory number declining. i would not be surprised as a little bit of a come down and that is what is happening, a little bit of volatility as

people look at gasoline inventory numbers going little a busy time for driving with the holidays. interesting to see that building gasoline inventories and we will see if it works down as people drive around the country to get their turkey dinner. mark? mark: tanks. autumn statement from philip hammond said you can economy will grow more slowly in 2017 than priestly forecasted and the -- there previously forecasted and the government will need to borrow more. and edwards was greg clark. anna? anna: thank you. and clark joins me, mp business secretary in the u.k. thank you for joining us on bloomberg. i wanted to ask you about the autumn statement and the context

and he described this as a wait and see budget. he set the chancellor do not do very much for you do you buy into this? budget that is a sober one for the medium and long-term. i think the figures has shown that the fundamentals of the british economy are strong and we are still growing and the fastest-growing and the g7. there is a weakening compared to previous forecast but not a collapse and so the right thing that philip hammond has done is to maintain our commitment to fiscal discipline very i think that is important and to think about how we can make our economy more productive in the long term. productivityl and is a good example of that. investing in signs and infrastructure. about fiscaltalk

discipline and getting the budget back in balance. and a vague target as soon as possible. what is the target that we will get there soon as possible? secretary clark: he was right to reinforce his commitment to bringing the budget back into balance. when you have the deterioration that the rba pointed out and you have to be sensible and realistic about this. and we will see the debt followed by the end of the other parliament but we want to get back into balance. hedid not have to signal, cut up -- could have said the intention and he was right to , he is philip hammond the one of was fiscally very prudent and a reflection of that. and in a portman commitment. anna: you mentioned the fiscal

poundsent, 23 billion and i was looking around for reaction to this. some account is welcoming get and some saying how much of it is new money. it is all new.: one of the big decisions was right to borrow and to invest in the potential of the economy, not in consumption but investments. all of this is an investment into infrastructure and investment in research and development in science. the businesses and scientific organizations that i have been speaking to on the last few days , i think of them particularly pleased to see this. what is a difficult time physically -- fiscally tower real term increase in the resources available for innovation and research and science.

strips to continue to continue to build that up over the years ahead, i think that's something this is welcome. anna: one thing businesses welcome is lower taxation, especially commitments around taxation. it is low by international standards. we have the united states with a new president-elect he talked about cutting corporation tax. a we with a race with the united states for corporations? secretary clark: the chancellor andeal for -- reconfirmed it is right. if we want to be an attractive place for businesses, that is willof our offer and so we maintain that commitment. obviously, in terms of the u.s. new administration has not taken office yet. as you know and your viewers and, there are local taxes

the national rate is not entirely comparable. let's talk about industrial strategy. a few mentions of things going to be done. you have a lot of work to do trying to shape what it means. industrials have been thrown around quite a bit by prime minister may since she took office. we still do not know what it means for picking winners and talking about national champions, what is it? what will they get? secretary clark: it is a commitment for the long-term to work with this is industries and consumers to make sure that the foundations of the british economy into the future are going to be repetitive to raise our level of productivity in particular. what are the elements? .he research and development we know if you could be more , andative, more productive

then we can be more prosperous as a country. the commitment that has been made to increase our investments in research and development not just in public funds but a theitment also to review durant d tax credits available creditsb -- r&d tax available to business. whether rail and rose to keep our economy competitive. and particular sectors where public policy can have a major influence, it is important to align those policies so we can be a good place to invest. and the chancellor's talking about charging points. we have got great in research and development in electrical vehicles and we are good on renewable energy now and our position in a place where

electrical vehicles is strong. .t brings policies together to work with businesses and lay it out of the next 15 years, i duringas been welcomed the months ahead and working with them. anna: as a driver of a hybrid car, i can testify for the need for more charging points. one of my colleagues is telling me she was at a briefing where it became clear that businesses are not asking the enough or the since that they can was working capital. why is it that businesses are not coming forward asking for assistance? secretary clark: it is generally across the board and the same to the kind of growth capital and getting smaller businesses to grow into larger ones without needing to sell out. in patientther it is

capital, what the chancellor signals is a real focus on understanding how we can makes the fund for private or public better available and to work with businesses. end: finally comics to the of our conversation, what opportunities do see for british business in the u.s. under the new president, the new administration? some of the early talk has been the possibility of nigel taking better something donald trump and spoken about. something your government has dismissed the need to do it. what opportunities do see? secretary clark: well for great ambassador and i talked them yesterday. anna: fighting to keep his position. secretary clark: he has done very well. the opportunity -- one of the lessons that we of taken in the u.k. from the break the vote is

sometimes, some people assume this the kind of richly from being ambitious -- kind of retreat from being ambitious. there's a consensus we need, as well as maintaining the eu, we need to look at the possibilities. i think we talked about exports to be working with businesses, to be attracting investments here, to be increasing expectations. that a different feeling things are moving anti-globalization in our goal for -- governments that we need to be more global. secretary clark: the consensus is we do need to be more prominent in the world and increased trading relationships and as for more. there was enthusiasm for that. and that is shared across the a veryent and america is

important partner. and of a talking with us today. , the u.k.clark business secretary. we have been speaking with a hearing from philip hammond. mark: great interview. breaking news -- the iraqi prime back thesaid iraq will opec a meeting. -- bear parta part of the oil cut. look at issues. on the news. there has been news that opec was speaking to do for i reckon i ran to be members of the meeting. .raq seemingly will cut oil rise in paris stay with us. this is bloomberg. ♪

vonnie: you're watching bloomberg. i am vonnie quinn. mark: i am mark barton. here's what we're watching. borrowing from bond sales. maybe a small hit cup and a plan. when will hear from egypt's finance minister next. vonnie: the-- of workforce could be changing, will it help? melissa news did or did not help with the u.s. election, a generation that is dubbed lazy and entitled. vonnie: egypt is hoping to raise $6 billion from international bond sales. exclusive interview, egypt's prime mister tells bloomberg the first cell may be delayed for a while. >> we were planning to do it by the end of november.

there has been volatility since the election has taken place because maybe on the change in philosophy of how the economy electun and the president and there has been volatility and we are really waiting. ready tobus is getting cut 1000 office jobs. the giant was to eliminate duplication between it's a main plane unit and the rest of the company. it is making it in public affairs, legal and human resources. one measure of economic growth in germany close to a 10 month high in november, purchasing .anagers index dipping lightly acceleration and services activity largely upset the slow down in german manufacturing. boeing super hornet spray it is a stock capital measure. canada's beginning a five-year

bidding process for new warplanes. campaigned on abandoning plans to buy lockheed martin jets. now the company will be allowed to take part in the bidding. vonnie:n -- a millennials live all over the world. 89 million of them in the u.s. alone, making them the largest generation. politicians need to their vote and companies want to sell things to themselves. some say they get too much press. the 89 million number in the u.s. is people born between 1981 and 2000. those 16 to 35 years old. and a globalnsion recession. the apple revolution and mayhem of 9/11 and the wars in iraq and afghanistan. they are racially diverse and well-educated. they are not getting married as

young as quite a few live with their parents. the background. the so-called millennial generation was coined in the night and one book "generations." attitudes depend on age, shared experiences with other generations as unique experiences and racial and ethnic composition. perhaps best defined generation in the u.s. are the baby boomers, those born in 1946 to 1964 who are parents to melinda's. the argument is millennials are net connect the bigger share of voting age. only about half of the citizens voted in this election. on a plurality of register voters registered as independents. 2016 was the fourth consecutive u.s. election in which most 18-29-year-old daughters went for democrats. 55 percent of those chose clinton and 37% backed trump.

trump one the same share the youth vote as a mitt romney did in 2012. clinton fell short of barack obama. 8% did not vote for either or do not vote at all. you can read more for millennial's and that is your global business report. ank: in pharma news, experimental eli lilly drug failed to help alzheimer's patients. shares are dropping at the two-year low. for more, bloomberg intelligence's emphasis -- sam. sam, five to start with you. how much of a blow is it to eli lilly? sam: i would not naturally take it out. it is risky, especially in this kind of more difficult areas where the outcomes are difficult

to measure. and ii lily, a setback think everybody view this as high risk proposition. we certainly did not think we were the camp that did not think it would not work out. the reality is it does shave off from concerns about $1.5 billion in sales in 2020 is a dutch drug is completely dead which is possible. mark: what does it mean for biogen? it is close behind eli lilly. sam: it is true that the biogenic drug is more potent but has more side effects than the eli lilly drug. the problem is we do not know why it did not work out. it is possible that not enough drug got into the brain. your for privileged organ that is protected from everything else. if it is because not enough got into the brains, it could affect the same thing for, same issue

for biogen. potent, maybe they will overcome that. very difficult to turn. we safer those small drugs the company is developing. it is slightly different approach to attack the same molecular problem in the brain. vonnie: if i can turn to you, eli lilly has wrapped up a meeting. have you had a chance to listen to the call or see in of the headlines from the call, what is next for eli lilly in terms of the drug? will be to see the full data when it is presented next month at an alzheimer's meeting. inre is process understanding is that the use the drug in earlier patients. it is some work that is ongoing and assess whether they should keep it going or not. could there be a role in combination with other products

like with the with hiv and cancer? maybe a matter of hitting the disease with a few different drugs. i was not say it is fully dead, but i think from investor perspective, people removing now and it will take more of a wait and see approach if there's potential and other uses in treating other patients. taken ahe stock is nosedive, down about 12%. is it something it can come back from? vamil divan: the reaction is sort of in line if the data was what it turned out to be. we think there is other stories that are interesting and exciting and new products on the diabetes side and inflammation side, oncology. a lot more to this story is an alzheimer's. yes, it will take a little time to recover that a lot a catalyst and products that can get people

interested and some people do not want to be involved because they knew and they may look at the stock again. here.-- sam: sam regarding theews company will be the diabetes drug and its potential fda expanded label. what is your stance on that? panel,cil, a very close what you think -- how do think it will play out? vamil divan: it was a close vote. we think they will get information into the label. such as a formal indication or adding the data on the back of the label so that representatives can talk about with physicians. secondk it is likely the approach because the vote was close. there are still question of how they got it.

we think it will be more likely in the label and data that the representatives will talk about and not the kind you can lead a television ad or something to consumer with saying in dramatically lowers harder test. help thehould still markets of the drug. on the same drug, do see potential of it? i am not sure many analysts have taken the approach in their modeling of potential use in nondiabetic patients with heart failure, which is a much -- at least his beautiful market. what is the view? vamil divan: the data suggest it could work and that's what they are studying now. i do not think analysts, many other analysts have incorporated that a bit upside to the numbers. it will take time for the numbers. another areaainly

for opportunity outside a diabetes for their product. i think it will be more of a wait and see instead of excited to early. the potential payoff for medicine that potentially slows the progression of alzheimer's. what is the payoff? million question. i do not know. if you do the math sometimes analysts do, this is a disease that goes on for years. if you assume you have to be treated for years, you will have consumers added. it would be in the billions, no doubt. at the end of the day, you need a drug area -- you need a drug does say way you need to chew and for a long time, especially the elderly, safely. , sometimes you pay a side effect price. go back toi could

you, the rating on the stock. 24 of 26 analysts have buy ratings, might you change that? vamil divan: no, we are not changing. we have change the target price. $87.$96 down to driven by the other products that they briefly launched or in development and we think there is upside to where it was yesterday and where it is falling down today. mark: thank you for joining us. vamil divan at credit squeeze and sam fazeli. this is a bloomberg. on the european close -- u.k. chesler philip hammond said of the economy will grow more morey more previously -- slowly than previously forecast. all of the market reaction. european stocks. stocks are lower today.

as they all have rebounded in the last few minutes. three days of gains earlier. lower for the first day. the clients in germany and the clients in for -- declines in germany and in france. the trend continues and pound is down by 0.1%. the euro decline continues. finishing off with the bond markets. the yield on the u.k. 10 year creeping higher. growth forecasts cut and the government will need to borrow money over the next five years. this is bloomberg. ♪

left in thenutes trading day. i am mark orton. vonnie: i am vonnie quinn.

this is the european close on "bloomberg markets". ♪ mark: we will take you from washington to london. we will cover stories out of new york and vienna. here is what we are watching today. five months to the day after theain voted to leave european union, u.k. chancellor philip hammond says the economy will grow more slowly than previously forecast and the governments will need to borrow more. vonnie: president-elect donald trump makes more appointments. ben carson gets a job at housing secretary. nikki haley will be ambassador to the united nations. shares of eli lilly are getting hit today, and experimental alzheimer's drug failing in its final trial. mark: